August 31, 2017 11:30 pm JST

Sharp promotes pricy TV as Foxconn tries to build US panel plant

Key iPhone assembler's Wisconsin facility is still pending approval from local senate

DEBBY WU and NATSUKO KATSUKI, Nikkei staff writers

Sharp promotes its latest 8K TV product in Taipei. (Photo by Jason Tan)

TAIPEI/TOKYO -- Sharp on Thursday unveiled a new, pricy high-resolution TV in key markets at a time that its parent iPhone assembler Hon Hai Precision Industry is seeking to build a facility in the U.S. to churn out panels for this premium line of TV sets.

"Creating an 8K TV ecosystem will be our key strategy. We will roll out our 8K TV products in China, Taiwan, Japan and Europe starting from the end of this year," Yoshihiro Hashimoto, a Sharp executive, told reporters in Taipei.

Hashimoto was borrowing a phrase used by Terry Gou, chairman of Hon Hai, better known as Foxconn. Gou announced in July that he would build a panel facility in Wisconsin to establish an "8K TV ecosystem."

8K is the highest TV resolution, offering a display of 7,680 x 4,320 pixels. Sharp is the first company to promote its premium TV range using the emerging 8K technology as the main selling point.

On Thursday, Sharp held promotional events simultaneously in Berlin, Shanghai, Taipei and Tokyo.

It did not hold a similar campaign in the U.S. because its brand in the country is currently licensed to Chinese electronics company Hisense in a deal signed shortly before Foxconn acquired the Japanese company in 2016. Hisense has the right to use the Sharp brand to market its products in North America until early 2021.

Sharp is now suing Hisense in the U.S. as part of its efforts to curtail the licensing agreement. Sharp President Tai Jeng-wu told reporters that he was considering using an alternative brand to sell Sharp products in the U.S. before his company settles the licensing issue, although details remain unclear.

Sharp has not disclosed the tag price for its upcoming 8K TV range, but a source told Nikkei Asian Review that the starting price will be around 1 million yen ($9,045).

By comparison, the most expensive model in LG Display's premium OLED TV range popular in the U.S. is priced at around $8,000.

Sharp's 8K TV is based on existing liquid crystal display technology. OLED TV, an emerging product offered by LG and Sony, boasts a sharper color contrast, though it is struggling to offer 8K resolution due to limits in production technology, said Eric Chiou, an analyst at Taipei-based research firm WitsView.

"Sharp does not necessarily have to sell many units of its pricy premium 8K TV. The cutting-edge product can serve as a marketing focus to help boost the sales of Sharp's overall TV product line," Chiou said.

Chiou cautioned that the Japanese company may face stiffer competition when Chinese rival BOE Technology Group begins churning out large LCD TV panels in the first half of 2018.

Sharp's Japanese affiliate Sakai Display Product, controlled by Gou, is the only 10th-generation panel facility in the world that can make large LCD TV panels now.

But Sharp is expected to lose its technological edge when BOE's 10.5th-generation facility comes online next year that will allow it to make even bigger panels.

Foxconn is expected to build its own 10.5th-generation facilities in both China and the U.S., but the Foxconn-Sharp consortium is lagging behind BOE, Shenzhen China Star Optoelectronics Technology, and South Korea's LG Display. Ahead of Foxconn, the three have already placed orders for essential production equipment, which is known to be limited in supply, from Japan's Nikon, according to Chiou.

Also, while Foxconn has gained approval and government support for its new 10.5th-generation facility in the southern Chinese city of Guangzhou, a similar $10 billion project in Wisconsin, supported by Republican Governor Scott Walker, is still up in the air due to concerns about tax incentives and environmental protection.

The $3 billion tax incentive to be awarded to Foxconn has been approved by the Wisconsin Assembly, but still needs to be waved through by the local senate. The two houses in Wisconsin are both controlled by ruling Republicans.

Earlier in August, Wisconsin Senate Majority Leader Scott Fitzgerald seemed to be dithering over the deal when he told a local radio station that he was worried Foxconn would not make good on its promise to employ a certain number of locals, according to U.S. reports.

Chris Larson, a prominent Democratic state senator in Wisconsin, told Nikkei Asian Review earlier this week that it was hard to say if his house could pass the Foxconn deal before Sept. 30, the non-binding deadline agreed by Walker and the Taiwanese company to get the investment proposal approved by the two-house legislature.

Asia300

BOE Technology Group Co., Ltd.

China

Market(Ticker): SHE(000725)
Sector:
Industry:
Electronic Technology
Electronic Equipment/Instruments
Market cap(USD): 33,437.01M
Shares: 34,798.39M
Asia300

LG Display Co., Ltd.

South Korea

Market(Ticker): KRX(034220)
Sector:
Industry:
Distribution Services
Electronics Distributors
Market cap(USD): 9,535.47M
Shares: 357.81M
Asia300

Hon Hai Precision Industry Co., Ltd.

Taiwan

Market(Ticker): TAI(2317)
Sector:
Industry:
Electronic Technology
Computer Peripherals
Market cap(USD): 60,685.52M
Shares: 17,328.73M

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